Paid Off $11,500 of Credit Card Debt Today
Ok, it sounds bigger than it is. Perhaps you recall back in July when Citibank told me to use their money to make more money? I took out $12,500 in a 0% balance transfer for 7 months, with a $75 fee. I stuck it in my savings account earning about 3.5% (now down to under 2%).
Over that 7 months, I’ve earned roughly $175, which gives me an easy profit of about $100. Had interest rates not dropped precipitously, and had the term been longer (a year), I would have made a pretty nice profit, but as it is, $100 for a 10 minute phone call and a couple internet transactions wasn’t bad.
Oddly, the transfer wasn’t due until March 1, but my new statement was due Feb 27, so I decided to get the money out early so I don’t test the bank transfer gods. Today I sent out a payment for about $11,500, which was the balance remaining after paying the minimum monthly payments since August.
With the current economy, “credit card arbitration”, or using low rate, low fee transfers to make money, is pretty much dead. There’s a few opportunities for those with perfect credit, but the card companies have caught on and have removed the maximum fees on all their transfers. Other than using a transfer to pay off our car loan in 2007, this was the only other time I’ve used a balance transfer for something other than transferring balances between cards.
And you all thought I was stupid for doing this. Actually, some of you will still say I was stupid to take the risk, but I knew what I was doing, understood and mitigated the risks as much as I could, and was successful. But now that we’re looking at a home refinance, I won’t be trying anything like this soon.